Thiruvananthapuram: The Kerala government on Tuesday borrowed an additional Rs 3,500 crore to disburse salary and pension from Wednesday.
The borrowing is usually raised at an average interest rate of 6 per cent, but this rose to 7.06 per cent on Tuesday. The state borrowed from the open market through the Reserve Bank of India.
The state has availed Rs 2,000 crore at an interest rate of 7.04 per cent with a repayment period of 13 years and Rs 1,500 crore at 7.06 per cent interest for 18 years. With this, the government's total borrowings for this year touch Rs 15,000 crore.
The government had borrowed Rs 2,500 crore last Tuesday.
Though the state cites implementation of development activities for frequent borrowings, these are spent on disbursing salary, pension, arrears and interest payments. Instead, a good portion of the infrastructure development activities is carried out via the Kerala Infrastructure Investment Fund Board (KIIFB). And KIIFB's main source of income is also borrowings.
Rs 360-crore grant for panchayats
New Delhi: The Centre has sanctioned a grant of Rs 360.9 crore for the panchayats in Kerala. This is part of the amount earmarked for this financial year, as per the recommendations of the 15th Finance Commission. The amount is meant for sanitation, works towards attaining open-defecation free (ODF) status, drinking water supply, rain water harvesting, and water purification. So far, Rs 601.50 crore has been allocated for Kerala in this financial year.
Sixty per cent of the total amount allocated to panchayats is tied grants, to be used only for sanitation, drinking water supply, and rain water harvesting. The remaining 40 per cent can be used for all expenses, other than salary disbursal, as per the discretionary powers of the panchayats.
The Centre has released Rs 13,385.7 crore for 25 states in this regard. The states must transfer the amount to panchayats within 10 days.